Exercise 3 Essay

554 WordsSep 28, 20153 Pages
Exercise 1 E 3-4 (a) Describe each transaction. 1. The company issued shares of stock to stockholders for $20,000 cash. 2. The company purchased $5,000 in equipment on account with $1,000 paid in cash making $4,000 go into accounts payable. 3. The company paid $750 on supplies. 4. The company is given $4,100 for services rendered and billed $5400 to accounts receivable. this gave $9500 to the stockholders equity’s revenue account. 5. The company paid $1,500 cash on accounts payable. 6. The company paid a $2,000 dividend. 7. The company paid $800 for rent. 8. The company collected $450 from a customer. 9. The company payed $3,000 for employees salary expenses. 10. The company paid $300 for utility expenses. (b) Determine how much stockholders’ equity increased for the month. $23,100 (c) Compute the net income for the month. $23,100 E 3-9 Accounts Debit Credit Accounts Payable $22,550 Equipment 1,000 Salarie Expense $530 Accounts Receivable $6800 Notes Payable $1200 Total $25,280 $6800 P 3- 5A Journal Accounts DEBIT CREDIT Cash Accounts Receivable supplies Accounts Payable $1,900 $1,300 $300 Unearned Service Revenue $700 Common Stock $1,800 Service Revenue $2,800 Salaries and Wages Expense Rent expense Total $1,875 $900 $4,375 $7,200 1. Cash - The cash account was not changed because the earnings were distributed to other accounts. 2. Accounts Receivable - The company was credited $1,900 for services. 3. Supplies - The supplies account was debited $1,300 for architectural supplies. 4. Accounts Payable - This account was debited $300 for account payable dues. 5. Unearned Service Revenue - The account was credited $700 for a future job. 6. Common Stock - Stockholders invested $18,000 cash in exchange for common stock. 7. Service

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